Social Security: A-02-00-10038

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SOCIAL SECURITY

ICN 31170-23-168

Office of the Inspector GeneralMEMORANDUM

Date: June 18,2001

Larry G. MassanariActing Commissioner

of Social Security

Refer To:

I nspector Generalrom:

Subject:udit of the Social Security Administration's Fiscal Year 2001 Annual Performance Plan

(A-02-00-10038)

The attached final report presents the results of our audit. Our objective, in response toa request from the Chairman of the Senate Committee on Governmental Affairs, was to

determine what improvements the Social Security Administration made to its

Fiscal Year 2001 Annual Performance Plan to make it a document that measures

performance in a meaningful way.

Please comment within 60 days from the date of this memorandum on corrective action

taken or planned on each recommendation. If you wish to discuss the draft report

please call me or have your staff contact Steven L. Schaeffer, Assistant Inspector

General for Audit, at (410) 965-9700.

James G. Huse, Jr.

Attachment



OFFICE OFTHE INSPECTOR GENERAL

SOCIAL SECURITY ADMINISTRATIONREVIEW OF THE

SOCIAL SECURITY ADMINISTRATION’SFISCAL YEAR 2001

ANNUAL PERFORMANCE PLANJune 2001 A-02-00-10038

AUDIT REPORT



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Mission

We improve SSA programs and operations and protect them against fraud, waste,and abuse by conducting independent and objective audits, evaluations, andinvestigations. We provide timely, useful, and reliable information and advice to

Administration officials, the Congress, and the public.

Authority

The Inspector General Act created independent audit and investigative units,called the Office of Inspector General (OIG). The mission of the OIG, as spelledout in the Act, is to:

� Conduct and supervise independent and objective audits andinvestigations relating to agency programs and operations.

� Promote economy, effectiveness, and efficiency within the agency.

� Prevent and detect fraud, waste, and abuse in agency programs andoperations.

� Review and make recommendations regarding existing and proposedlegislation and regulations relating to agency programs and operations.

� Keep the agency head and the Congress fully and currently informed ofproblems in agency programs and operations.

To ensure objectivity, the IG Act empowers the IG with:� Independence to determine what reviews to perform.� Access to all information necessary for the reviews.� Authority to publish findings and recommendations based on the reviews.

Vision

By conducting independent and objective audits, investigations, and evaluations,we are agents of positive change striving for continuous improvement in theSocial Security Administration's programs, operations, and management and inour own office.



Executive Summary

OBJECTIVE

We initiated this audit in response to an April 18, 2000 request from the Chairman of theSenate Committee on Governmental Affairs to identify improvements in the Fiscal Year(FY) 2001 Annual Performance Plan (APP), and to an earlier request of CongressmenSessions, Horn, Burton, and Armey to review continuing implementation of theGovernment Performance and Results Act (GPRA) of 1993. Our objective was todetermine the improvements the Social Security Administration (SSA) made to itsFY 2001 APP, and assess the extent to which it provides indicators to measureperformance in a meaningful way.

BACKGROUND

GPRA established a framework through which Federal agencies are required to setgoals, measure performance, and report on the extent to which the goals were met. Toaccomplish this, agencies are required to prepare 5-year strategic plans, APPs, andannual performance reports.

The strategic plan, which should include a comprehensive mission statement, identifiesgeneral goals and objectives, describes how the agency intends to achieve those goalsand objectives, and identifies critical external factors that could affect achievement ofstrategic goals and objectives. The strategic plan is the starting point for setting annualgoals. The APP provides the direct link between strategic goals and agencyperformance. The APP identifies: (1) the annual performance goals the agency will useto gauge progress toward accomplishing its strategic goals and (2) performancemeasures to be used to assess annual progress.

SSA was a pilot Agency that developed plans and reports prior to full implementation ofGPRA in March 2000. SSA submitted its first strategic plan under GPRA, “Keeping thePromise,” in September 1997. SSA completed its first APP, which defined performanceindicators and goals for FY 1999, in February 1998. SSA released the FY 2000 and2001 plans in February 1999 and February 2000, respectively. SSA began reporting itsaccomplishments as part of its annual Accountability Report in FY 1995.

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038) i



RESULTS OF REVIEW

SSA’s FY 2001 APP represents SSA’s strong commitment and evolving progress tomeet the objectives of GPRA. The APP responds to many of the criticisms aboutprevious plans. Acknowledging the evolving nature of GPRA reporting, we believe that

SSA can take additional action to make future performance plans more useful todecisionmakers and allow a better assessment of progress toward world class service.The APP would be more useful if it contained: (1) goals for those managementchallenges for which measurable corrective action is possible; (2) more outcome-basedand service-related measures; (3) a basis upon which to compare goals andsubsequent performance with customer expectations; and (4) more specificidentification of resources needed to accomplish planned performance. Additionally,SSA, notes in the APP section on crosscutting areas with other agencies that itperforms work related to Medicare enrollment and premium billing and adjustmentshowever, no related performance goals are established.

CONCLUSION AND RECOMMENDATIONS

GPRA is intended to increase agency accountability through a program of strategicplanning, establishment of annual goals, and reporting of annual performance againstgoals. SSA has continued to make progress in establishing goals in the APPs tomeasure its performance. The FY 2001 APP addressed concerns expressed by theOffice of the Inspector General (OIG) and the U.S. General Accounting Office aboutSSA’s FY 1999 and 2000 APPs.

We believe that opportunities remain to further address management challenges, refineselected measurements to better reflect performance, provide perspective on the extent

to which goals established will further “world class service,” and link resources toplanned performance. Consequently, we recommend that SSA implement the followingto enhance the usefulness of future APPs:

• Set goals for those management challenges for which measurable corrective actionis possible;

• Establish more outcome-based and service-related measures;

• Provide a basis upon which to compare goals and subsequent performance withcustomer expectations;

• Specifically identify resources needed to accomplish planned performance; and

• Coordinate with the Health Care Financing Administration to determine whichagency should establish performance goals for service to Medicare recipients.

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038) ii



AGENCY COMMENTS

SSA agreed with four of our recommendations and disagreed with one. The full text ofSSA’s comments is included in Appendix B.

In agreeing with recommendation 2 “establish more outcome-based and service-relatedmeasures”, SSA correctly noted that establishing outcome-based and service-relatedmeasures is an evolving process. Accordingly, SSA further noted that the FY 2002 APPindicates that efficiency indicators will be developed for initial claims and post-entitlement workloads, and that the feasibility of establishing measures for additionalworkloads will be evaluated.

Concerning recommendation 3 “provide a basis upon which to compare goals andsubsequent performance with customer expectations”, SSA responded that there maybe value in such comparisons as they affect specific measures, and notes that goals areset based upon customer interests in combination with historical experiences,

benchmarks, and investments.

SSA did not agree with recommendation 4 “specifically identify resources needed toaccomplish planned performance”. While recognizing the desirability of a strong linkbetween budget and planned performance, SSA believes that the intent of GPRA is metthrough SSA’s budget justifications and performance plans.

In its response, SSA provided technical comments that were incorporated in this finalreport, as appropriate.

OIG RESPONSE

We are pleased that SSA agreed with four of our five recommendations, and we believethat SSA’s planned actions should contribute toward a more informative APP. Theultimate objective of GPRA is to measure agencies’ performance against relevant goalsto allow an assessment of meaningful accomplishments, and we encourage SSA’splanned efforts.

We believe that agencies must establish meaningful goals that strive to meetcustomers’ expectations within the constraints of budgetary resources. Therefore, weencourage SSA to make comparisons between goals and subsequent performance withcustomer expectations to ensure that goals and performance are responsive to

customer expectations.

Concerning establishing a link between resources and performance, we acknowledgethe value of the information that SSA has provided. Nevertheless, we believe that, tothe extent possible, planned costs to achieve specific measures should be disclosed inorder to establish greater accountability and to begin moving toward compliance withfederal cost accounting concepts.

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038) iii



Table of Conten ts Page

INTRODUCTION .................................................................................................... 1RESULTS OF REVIEW......................................................................................... 4APP Demonstrates Improvement and Commitment to GPRA … ........................... 4Goals Needed for Management Challenges………………………………………….. 4More Outcome and Service-Related MeasuresPossible…………………………………………………………………………………… 5Discussion of Goals and Customer Expectations Would BeHelpful…………………………………………………………………………………….. 7Plan Could Better Reflect Cost………………………………………………………… 8Responsibility for Medicare Services Needs to Be Established……………………. 8CONCLUSIONS AND RECOMMENDATIONS ....................................................10APPENDICES

Appendix A - Fiscal Year 2001 Performance Indicators and GoalsAppendix B - Agency CommentsAppendix C - OIG Contacts and Acknowledgments

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038 )



Acronyms APPDIFYGAOGPRAHCFAOASDIOIGOMBOQAOSMRep PayeeRSISSASSI

Annual Performance PlanDisability InsuranceFiscal YearGeneral Accounting OfficeGovernment Performance and Results ActHealth Care Finance AdministrationOld-Age, Survivors, and Disability InsuranceOffice of the Inspector GeneralOffice of Management and BudgetOffice of Quality Assurance and Performance AssessmentOffice of Strategic ManagementRepresentative PayeeRetirement and Survivors InsuranceSocial Security AdministrationSupplemental Security Income

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038)



Introduction OBJECTIVE

We initiated this audit in response to an April 18, 2000 request from the Chairman of theSenate Committee on Governmental Affairs to identify improvements in the Fiscal Year(FY) 2001 Annual Performance Plan (APP), and to an earlier request of CongressmenSessions, Horn, Burton, and Armey to review continuing implementation of theGovernment Performance Results Act (GPRA) of 19931. Our objective was todetermine the improvements the Social Security Administration (SSA) made to itsFY 2001 APP, and assess the extent to which it provides indicators to measureperformance in a meaningful way.

BACKGROUND

The intent of GPRA is to improve the performance of Government programs by havingagencies clarify their missions, establish goals and strategies for attaining them,measure performance, and report progress in achieving established goals. The APPestablishes the connection between long-term strategic goals outlined in the strategicplan and SSA’s day-to-day activities.

GPRA specifies the general content of the APP, and the Office of Management andBudget (OMB)2 has issued general guidance and principles to assist agencies indeveloping APPs. Generally, the APP should:

� detail the performance goals and indicators for the FY;

� describe the operational processes, skills, technology, and the resources needed tomeet the goals;

� align budget resources with performance goals;

� contain performance information for several FYs;

� describe how the performance will be verified and validated; and

� discuss performance-related studies and analyses.

1Public Law No. 103-62

2OMB Circular A-11 Part 2, “Preparation and Submission of Strategic Plans, Annual Performance Plans,

and Annual Program Performance Reports”, July 1999.Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038) 1



In September 1997, SSA released its first strategic plan, “Keeping the Promise,” sincebecoming an independent Agency in 1995. SSA has established five broad strategicgoals in support of its mission, each of which has supporting strategic objectives. Thefive strategic goals are to:

�Promote valued, strong and responsive Social Security programs and conducteffective policy development, research and program evaluation;

� Deliver customer-responsive, world-class service;

� Make SSA program management the best in business, with zero tolerance for fraudand abuse;

� Be an employer that values and invests in each employee; and

� Strengthen public understanding of the Social Security programs.

SSA’s FY 2001 APP is organized by the five strategic goals, for which SSA describesthe activities performed in support of each goal. There are 17 strategic objectives and2 categories of output measures for major budgeted workloads supporting the5 strategic goals. Under the objectives and categories, there are 71 specificperformance indicators (refer to Appendix A). A general rationale, as well as baselineperformance information, data sources and background information, is provided foreach of the indicators.

SCOPE AND METHODOLOGY

To meet our objectives, we reviewed SSA’s FY 2001 APP and revised FY 2001 APP todetermine adherence to GPRA and OMB requirements, as well as to APP guidanceissued by the U.S. General Accounting Office (GAO). We analyzed the FY 2001 APP todetermine whether SSA addressed the weaknesses noted in the May 11, 1999 reportby the Committee on Ways and Means, Subcommittee on Social Security, whichevaluated SSA’s FY 2000 APP. We compared the FYs 1999, 2000, and 2001 APPs todetermine the extent to which the FY 2001 APP addressed concerns noted by GAO3

with SSA’s FY 1999 APP and by the Office of the Inspector General (OIG) with theFY 19994 and 2000 APPs5.

We also analyzed the FY 2000 APP to assess the extent to which the performance

measures established were comprehensive and appropriate for what they purported tomeasure, and the extent to which the measures addressed major initiatives and

3“The Results Act: Observations on SSA’s FY 1999 Performance Plan” (GAO/HEHS-98-178R),

June 1998 and “Observations on the Social Security Administration’s Fiscal Year 1999 PerformanceReport and FY 2001 Performance Plan” (GAO/HEHS-00126R), June 2000.4

OIG observations were documented in a letter to SSA, which did not become a public report.5

“Review of the Social Security Administration’s Fiscal Year 2000 Annual Performance Plan”(A-02-99-03007), November 1999.

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038 ) 2



management challenges identified by our on-going work. We discussed our preliminaryobservations with Office of Strategic Management (OSM) staff to determine if ourconcerns with the FY 2001 APP would be addressed in the revised FY 2001 APP anddraft FY 2002 APP.

Our field work was conducted at OIG’s New York Field Office and SSA Headquarters inBaltimore, Maryland during August and September 2000. The entity audited was theOSM within the Office of the Commissioner. Our audit was performed in accordancewith generally accepted government auditing standards, as applicable to a performanceaudit.




Results of Review SSA’s FY 2001 APP demonstrates a strong commitment to GPRA objectives. The APPdescribes planned performance in a meaningful way, and generally complies with

GPRA reporting requirements. Although the FY 2001 APP represents an improvementover the FY 2000 APP, we believe that there are opportunities to make future APPseven more useful to decisonmakers. These opportunities include having: (1) goals forthose management challenges for which measurable corrective action is possible;(2) more outcome-based and service-related measures; (3) a basis upon which tocompare goals and subsequent performance with customer expectations; and(4) the resources needed to accomplish planned performance goals be better identified.

APP DEMONSTRATES IMPROVEMENT AND COMMITMENT TO GPRA

In response to congressional and GAO criticism of past plans, SSA made numerous

improvements to the FY 2001 APP. These changes will allow SSA and decisionmakersto better measure and assess performance in important areas such as appealsaccuracy, return-to-work initiatives, and the quality and timeliness of research efforts.The plan also includes significantly more data on information technology and capitalinvestment, an expanded discussion of significant external factors that could affect theaccomplishment of goals, a new section on major management challenges, and aschedule of evaluations to be completed during FY 2001.

GOALS NEEDED FOR MANAGEMENT CHALLENGES

In response to the recommendation in the OIG report on SSA’s FY 2000 APP that SSA

establish performance measures for all major initiatives and management challenges,SSA agreed that measurable indicators are useful to track major managementchallenges. However, SSA believed that numeric outcome or output goals asenvisioned by GPRA are not always appropriate, and internal measurable milestoneswould be sufficient.

SSA included the major management challenges identified by GAO and OIG as anAppendix in its FY 2001 APP, along with an approach and commitment for addressingthem. OMB guidance recommends that performance goals be established formanagement problems, particularly for problems whose resolution is mission-critical, orwhich could impede achievement of program goals. While we agree in principle with

SSA that not all management challenges may be measurable annually, we believe thatsome goals should be established to measure interim progress, such as reducing theearnings suspense file. While this area has been problematic for SSA for some time, nodirect indicators are established. In fact, a related indicator – accuracy of earningspostings – masks this issue by considering an appropriate posting to the suspense fileas accurate.






Indicators that directly measure outcome would be more reflective of SSA’sperformance. For instance, both GAO and OIG have recommended in the past thatSSA develop measures for 800-number performance that would provide moremeaningful information concerning customer waiting time, once connected. Currently,SSA does not have goals for customer waiting time, although its recent customer

service standards survey

8

disclosed that a significant majority of respondents considerservice good when they are on hold no longer than 2.2 minutes. Similarly, while SSAhas goals relating to the increase in debt collected and the amount of overpaymentscollected, additional indicators that reflect SSA’s commitment to debt managementcould be established. For instance, the timeliness of collection and the percent of debtwritten off could be meaningful. GAO made a similar observation in a recent report inwhich it noted that the overpayment collection indicators combine old and new debt, andas such, may mask SSA’s attempt to recover old debt.

Under the strategic objective to increase the range of program and information servicesavailable to customers over the phone and electronically by FY 2002, SSA had

four indicators. However, two did not directly support accomplishment of the goal, butmerely measured output activity, rather than an increase in service. For instance,one indicator was the number of customers accessing Social Security Online, whileanother was the number of Social Security Statement requests online, which is aservice already available. In its revised FY 2001 APP, SSA reworked the FY 2001goals under this strategic goal. Now the goals include the percent of customer-initiatedservices available via the Internet or automated telephone service, and the percent ofStates with which SSA has electronic access to various information. Additionally,increasing the range of services electronically is dependent upon resolution of clientauthentication issues, which has hampered SSA’s ability to expand electronic services.Establishing an interim goal related to resolution of these issues would allow SSA tomonitor its progress.

As reported in the past, we believe separate measures for the Supplemental SecurityIncome (SSI) and Disability Insurance (DI) initial disability claims processing wouldcreate greater accountability. Measurement of initial disability claims averageprocessing time represents a combined measure of both DI and SSI claims processing.Historically, there have been differences in the amount of time it takes to process casesin the different programs, and Federal regulations9 establish different threshold levelsfor DI and SSI disability claims processing times. Similarly, while SSA has a goal of a99.8 percent payment accuracy rate, this is based upon the benefit amount, and doesnot measure the percent of cases that may be inaccurate. This latter measure wouldmore directly measure the effect upon the customer.

8Office of Quality Assurance and Performance Assessment’s (OQA) “Customer Service Standards

Survey” report, June 21, 2000.9

20 CFR §§ 404.1642 and 416.1042, which established processing time standards for State DisabilityDetermination Services.




The FY 2000 APP had a goal to award a contract to design a methodology to validate asingle medical listing. OIG reported, and SSA agreed, that this indicator did not provideperspective on the scope of the effort, and that it would have been more valuable ifthere had been an indication and basis on which listings would be validated first, suchas the most commonly approved medical listing. The FY 2001 APP has a goal to

prepare a preliminary report on the development of a validation methodology formedical listings. We continue to believe that this is vague, and does not clearly identifyhow accomplishments in FY 2000 relate to the goal for FY 2001. Additionally, as werecently recommended10, we believe SSA should develop and report on a measure toassess the service level and outcomes of the medical listings update activities.

DISCUSSION OF GOALS AND CUSTOMER EXPECTATIONS WOULD BE HELPFUL

The intent of GPRA is to improve accountability for Federal agencies by setting goalsthat are reported in the APP, and through reporting in the APR, the progress inachieving the goals. Ultimately, Congress would be able to review these documents in

conjunction with agencies’ budget requests, and theoretically performance could impactfuture budgets. The effectiveness of this process depends upon realistic, yetchallenging, goals. As indicated previously, we believe that SSA could develop moreoutcome-based service indicators. Additionally, SSA needs to ensure that its goals arerealistic in terms of the expectations of its customers, and if not, the reasons for suchshould be disclosed. The intent of GPRA is not achieved, and congressionaldecisionmakers are not provided complete information, if disclosure is not made of theadequacy of the goals.

SSA has a goal in FY 2001 to have 92 percent of callers access the 800-number within5 minutes of the first attempt. This was the goal in FY 2000, and SSA actually achieved95.8 percent in FY 1999. However, the results of the Office of Quality Assurance andPerformance Assessment’s (OQA) June 2000 customer service standards surveydisclosed that a significant majority of respondents would consider accessing the 800-number within 2 minutes as good service, and that only 46 percent would consider theFY 2001 goal as good service.

Similarly, while SSA established a FY 2001 goal to release hearings decisions within120 days of the request for 30 percent of the cases, the OQA survey reported that only13 percent of the respondents rated this as good service. In the revised FY 2001 APP,SSA changed this goal to 35 percent within 180 days. Further, GAO recently reportedthat SSA has not established a goal for measuring the success of its efforts to achievemore consistent decisions between the initial and hearings levels of the appeal process,nor is timeliness to reach a final decision from the claimant’s perspective measured.

10“Status of the Social Security Administration’s Updates to the Medical Listings” (A-01-99-21009),

August 2000.




Establishing and achieving goals that are not meeting customers’ expectations canconvey an unrealistic view of performance. Agencies need to ensure that their goalsare consistent with customer expectations. However, resources and other constraintsmay not permit achieving customer expectations. When this is the case, the barriers tomeeting such goals should be disclosed. In the Message from the Commissioner in the

FY 2001 APP, he notes that meeting all performance expectations will be heavilydependent on receiving adequate resources and continuing success in automationefforts. This information is important for budget decisionmakers. Additionally theAgency should disclose if the goals achieve customer expectations to ensure customersatisfaction.

PLAN COULD BETTER REFLECT COST

GPRA allows flexibility to aggregate, disaggregate, or consolidate an Agency’s programactivities so that they align with performance goals. SSA’s FY 2000 APP alignsperformance goals by major functional responsibility rather than by budget account.

However, the resources, human capital, and technology necessary to achieve mostperformance goals are not adequately described. This is particularly important givencongressional concern that the recent multi-billion dollar investment for thereengineering of SSA processes had not been adequately linked to direct improvementsin service, productivity, and efficiency, and had not resulted in attainment ofperformance goals.

While SSA acknowledges, and we recognize that SSA’s business processes supportmultiple programs and strategic objectives, we believe specific costs could be identifiedwith many specific performance measures. For instance, under the strategic objectiveto promote policy changes that relate to the disability program, the goals for three of thefive measures involve contracted services. Additionally, staff years associated withmany planned output goals could be disclosed. The Statement of Federal FinancialAccounting Standards, Number 4, “Managerial Cost Accounting Concepts andStandards for the Federal Government,” requires that agencies determine the full costof each program activity. Specifying the planned cost and resources of these activitieswould provide a better link between performance and resources.

RESPONSIBILITY FOR MEDICARE SERVICES NEEDS TO BE ESTABLISHED

SSA provides support to deliver programs for other agencies, such as Medicare andMedicaid, and Food Stamps. This support involves primarily providing information toand/or accepting applications from potential beneficiaries. However, SSA is the primarycontact point and provides key services for the Medicare program, such as determiningeligibility for Medicare, processing applications, maintaining eligibility records, andcalculating and collecting premiums.




The Health Care Financing Administration (HCFA), which is responsible for Medicaredoes not have performance measures in its FY 2001 APP for those aspects of theMedicare program under SSA’s responsibility. Although SSA notes that it performswork related to Medicare enrollment, and premium billing and adjustments in the APPsection on crosscutting areas with other agencies, little information is given on the

nature of this work.




Conclusions and Recommendations

GPRA is intended to increase agency accountability through a program of strategicplanning, establishment of annual goals, and reporting of annual performance againstgoals. GPRA implementation will continue to be an evolutionary process as agenciescontinue developing outcome-based measures, and enhance the systems andprocesses that produce credible performance data. SSA’s FY 2001 APP representsSSA’s strong commitment and progress to meet the objectives of GPRA. The APPresponds to many of the criticisms about previous plans. Acknowledging the evolvingnature of GPRA reporting, we believe that additional action can be taken to make futureperformance plans more useful to decisionmakers and allow better assessment ofprogress toward world class service. Specifically, SSA should:

1. Set goals for those management challenges for which measurable corrective actionis possible;

2. Establish more outcome-based and service-related measures;

3. Provide a basis upon which to compare goals and subsequent performance withcustomer expectations;

4. Specifically identify resources needed to accomplish planned performance; and

5. Coordinate with HCFA to determine which agency should establish performance

goals for service to Medicare recipients.

AGENCY COMMENTS

SSA agreed with four of our recommendations and disagreed with one. The full text ofSSA’s comments is included in Appendix B.

In agreeing with recommendation 2 “establish more outcome-based and service-relatedmeasures”, SSA correctly noted that establishing outcome-based and service-relatedmeasures is an evolving process. Accordingly, SSA further noted that the FY 2002 APPindicates that efficiency indicators will be developed for initial claims and post-

entitlement workloads, and that the feasibility of establishing measures for additionalworkloads will be evaluated.

Concerning recommendation 3 “provide a basis upon which to compare goals andsubsequent performance with customer expectations”, SSA responded that there maybe value in such comparisons as they affect specific measures, and notes that goals areset based upon customer interests in combination with historical experiences,benchmarks, and investments.




SSA did not agree with recommendation 4 “specifically identify resources needed toaccomplish planned performance”. While recognizing the desirability of a strong linkbetween budget and planned performance, SSA believes that the intent of GPRA is metthrough SSA’s budget justifications and performance plans.

In its response, SSA provided technical comments that were incorporated in this finalreport, as appropriate.

OIG RESPONSE

We are pleased that SSA agreed with four of our five recommendations, and we believethat SSA’s planned actions should contribute toward a more informative APP. Theultimate objective of GPRA is to measure agencies’ performance against relevant goalsto allow an assessment of meaningful accomplishments, and we encourage SSA’splanned efforts.

We believe that agencies must establish meaningful goals that strive to meetcustomers’ expectations within the constraints of budgetary resources. Therefore, weencourage SSA to make comparisons between goals and subsequent performance withcustomer expectations to ensure that goals and performance are responsive tocustomer expectations.

Concerning establishing a link between resources and performance, we acknowledgethe value of the information that SSA has provided. Nevertheless, we believe that, tothe extent possible, planned costs to achieve specific measures should be disclosed inorder to establish greater accountability and to begin moving toward compliance with

federal cost accounting concepts.






Appendix A

FISCAL YEAR 2001 INDICATORS AND GOALS

Strategic Goal I: To promote valued, strong, and responsive social securityprograms and conduct effective policy development, research, and programevaluation.Objectives: To promote policy changes, based on research and evaluation analysis, that shape the old-Age, survivors, and disability insurance (OASDI) and disability insurance (DI) programs in a manner that takes account of future demographic and economic challenges, provides an adequate base of economic security for workers and their dependents, and protects vulnerable populations.

Performance Indicator Fiscal Year (FY) 2001 Goal

I.1 Identification, development, andutilization of appropriate barometermeasures for assessing theeffectiveness of OASDI programs

I.2 Preparation of analyses and reports onthe effect of OASDI programs ondifferent populations in order toidentify areas for policy change and

develop options as appropriate

I.3 Preparation of analyses and reports ondemographic, economic, andinternational trends and their effects of

OASDI programs in order to anticipatethe need for policy change and developoptions as appropriate

I.4 Preparation of research and policyevaluation necessary to assist theAdministration and Congress in

developing proposals to strengthen andenhance the solvency of OASDIprograms

I.1 Prepare summary and analysis on the barometermeasures

I.2 Prepare reports on:1. Effect of OASDI programs on women;2. Effect of OASDI programs on minorities;3. Effects of OASDI programs on low-wage

workers;4. Study on characteristics of people receiving DI

benefits;5. Analysis of the effect of changes in Social

Security retirement benefits on the DI program

I.3 Prepare analyses on the following topics:1. Labor force transitions in the elderly population;2. Implications for retirement income security of

shifts from defined benefit to defined contributionplans through study of lump-sum payments fromemployer pensions;

3. Differences across subgroups in saving;4. International retirement policy reforms

I.4 Prepare analyses on the distributional and fiscaleffects of solvency proposals developed by theAdministration, Congress, and other policy makers

(we will analyze new proposals and/or modifyanalyses of previous proposals based on new data)

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038) A-1



Objectives: To promote policy changes, based on research and evaluation analysis, that shape the supplemental security income (SSI) program in a manner that protects vulnerable populations, anticipates the evolving needs of SSI populations, and integrates SSI benefits with other social benefit

programs to provide a safety net for aged, blind, and disabled individuals.

Performance Indicator FY 2001 Goal

I.5 Identification, development, andutilization of appropriate barometermeasures for assessing theeffectiveness of the SSIprogram

I.6 Preparation of a report and completionof data collection on the SSI ChildhoodDisability Survey in order to assess theimpact of welfare reform, identify

areas of potential policy change, anddevelop options as appropriate

I.7 Preparation of analyses on sources ofsupport for the SSI population in orderto identify areas for better coordinationwith other social benefits and developoptions as appropriate

I.8 Preparation of analyses of complexSSA policies

I.5 Prepare summary and analysis on the barometermeasures

I.6 Complete interviewing for the first wave on the SSIChildhood Disability Survey

I.7 Prepare analysis and report on child supportenforcement

I.8 Prepare analyses on SSI simplificationopportunities




I.9 10%

I.10 10%

I.11 Prepare a preliminary report on the developmentof the validation methodology

I.12 Initiate main study data collection

I.13 Design and initiate implementation ofdemonstration projects

Objective: To promote policy changes, based on research and evaluation analysis, that shape the disability program in a manner that increases self- sufficiency and takes account of changing needs based on the medical,technological, demographic, job market, and societal trends.


I.9 Increase in number of DI adult workerbeneficiaries who begin a trial workperiod

I.10 Increase in number of SSI disabledbeneficiaries, aged 18-64, participatingin 1619(a)

I.11 Preparation of a research design todevelop techniques for validatingmedical listings

I.12 Preparation of reports on results of theNational Study of Health and Activity inorder to identify potentially eligibledisabled populations, interventions thatenable continued work effort amongthe disabled, and guide changes to thedisability decision process

I.13 Prepare analysis of alternative return-to-work strategies

Objective: Provide information for decisionmakers and others on the Social Security and SSI programs through objective and responsive research,

evaluation, and policy development.


I.14 Percent of customers assigning a highrating to the quality of the SocialSecurity Administration’s (SSA)research and analysisproducts in terms of accuracy,reliability, comprehensiveness,and responsiveness

I.15 Percent of major statisticalproducts that are timely

I.14 Establish a baseline

I.15 Establish a baseline for percent ofmajor statistical products that are

produced on schedule




Strategic Goal II: To deliver customer-responsive world-class serviceOutput Measures for Major Budgeted Workloads.

II.1 Retirement and Survivors Insurance claims processedII.2 SSI aged claims processedII.3 Initial disability claims processedII.4 Hearings processedII.5 Social Security number (SSN) requests processedII.6 800-number calls handled

UNITSII.1 3,083,000II.2 136,400II.3 2,057,000II.4 582,000II.5 16,300,000II.6 57,000,000

Objective: By 2002, to have 9 out of 10 customers rate SSA’s service as “good,” “very good” or “excellent,” with most rating it “excellent”.


II.7 Percent of SSA’s core business customers rating SSA’s overall serviceAs excellent, very good or good

II.8 Percent of SSA’s core business customers rating SSA’s overall serviceAs excellent

II.9 Percent of employers rating SSA’s overall service as excellent, verygood or Good

II.10 Percent of employers rating SSA’s overall service as excellent

II.11 Percent of callers who successfully access the 800-number within5 minutes of their first call

II.12 Percent of callers who get through to the 800-number on theirfirst attempt

II.13 Percent of public with an appointment waiting 10 minutes or less

II.14 Percent of public without an appointment waiting 30 minutes or less

II.15 Percent of 800 number calls handled accurately

II.7 89%

II.8 40%

II.9 94%

II.10 16%

II.11 92%

II.12 86%

II.13 85%

II.14 70%

II.15a 90% serviceII.15b 95% payment




Objective: By 2002, to increase the range of program information services available to customers over the phone and electronically


II.16 New or expanded serviceavailable over the phone

II.17 New or expanded serviceavailable electronically

II.18 Number of customersaccessing Social SecurityOnline

II.19 Number of online SocialSecurity Statement requestsas compared to the number of800 Number ARU SocialSecurity Statement requests

II.16 ake retirement or survivors claims immediately over theTelephone, or in person, as long as the applicant has allthe Information needed – fully implemented

II.17 Pilot/implement additional forms and transactionalservices, Including:

• Retirement and Survivors claim forms; and• Additional on-line transactional services for

beneficiaries; and• Establish an Electronic Death Certification pilot with the

Bureau of Vital Statistics; verification of name/SSNmatch before sending data to SSA

II.18 23 million (as measured by SSA servers)

II.19 50 percent initiated on Internet

Objective: To raise the number of customers who receive service and payments on time.


II.20 Initial disability claims average processing time (days)

II.21 Hearings average processing time (days)

II.22 Percent increase in Production per Workyear in hearings process

II.23 Percent of OASI claims processed by the time the first regularpayment is due or within 14 days from effective filing date, if later

II.24 Percent of SSI aged claims processed by the time the first regularpayment is due or within 14 days of the effective filing date, if later

II.25 Percent of original and replacement SSN cards issued within 5 daysof receiving all necessary documentation

II.20 117 days

II.21 208 days

II.22 14%

II.23 83%

II.24 TBDOnce baselineEstablished

II.25 97%

T




UNITSIII.1 1,729,000III.2 2,050,000III.3 259,400,000III.4 7,461,900

Strategic Goal III: To make SSA program management the best-in-business,with zero tolerance for fraud and abuse.Output Measures for Major Budgeted Workloads

III.1 Periodic review of continuing disability reviews (CDR) processedIII.2 SSI non-disability redeterminationsIII.3 Annual earnings postingsIII.4 Representative payee actions

Objective: To make benefit payments in the right amount.


III.5 Dollar accuracy of OASI payment outlays: % w/o overpayments% w/o underpayments

III.6 Disability determination services (DDS) net decisional accuracy rate

III.7 DDS allowance performance accuracy rate

III.8 DDS denial performance accuracy rate

III.9 Office of Hearings and Appeals decisional accuracy rate

III.10 Dollar accuracy of SSI payment outlays: % w/o overpayments% w/o underpayments

III.11 Percent of SSN issued accurately

III.5a 99.8%III.5b 99.8%

III.6 97%

III.7 96.5%

III.8 93.5%

III.9 87%

III.10a 95.5%III.10b 98.8%

III.11 99.8%

Objective: To become current with DI and SSI CDR requirements by 2002.


III.12 Percent of multi-year (FY 1996-2002) CDR plan completed III.12 86%

Objective: To maintain through 2002, current levels of accuracy and timeliness in posting earnings data to individual’s earnings records.


III.13 Percent of wage items posted to individuals’ records bySeptember 30

III.14 Percent of earnings posted correctly

III.13 98%

III.14 99%






Strategic Goal IV: To be an employer that values and invests in eachemployee.Objective: To provide the necessary tools and training to achieve a highly skilled and high-performing workforce.


IV.1 Percent of offices with access to Interactive VideoTraining/Interactive Distance Learning

IV.2 Formal management development programs implemented

IV.3 Percent of managerial staff participating inmanagement/leadership development experiences

IV.1 100%

IV.2 All leadership programscontinued. Decisions on futureSenior Executive Staff/CareerDevelopment Plans & ALPhave yet to be made.

IV.3 33 1/3%

Objective: To provide a physical environment that promotes the health and well-being of employees.


IV.4 Percent of employees reporting they are satisfied with thelevel of security in their facility

IV.5 Percent of environmental air quality surveys completed andpercent of the corrective actions taken when called for

IV.6 Number of facilities having water quality testing and percent

of corrective actions taken when called for

IV.7 Number of relocated offices having security surveys andpercent of SSA accepted security recommendationsimplemented

IV.4 75%

IV.5a 20% facilities surveyed,IV.5b 75% corrective actions

Taken

IV.6a 42 facilities tested,

IV.6b 100% corrective actionstaken

IV.7a 150 offices surveyed,IV.7b 87% acceptedrecommendations implemented




Objective: To promote an Agency culture that successfully incorporates our values.


IV.8 Create Agency change strategy IV.8 Implement strategy

Objective: To create a workforce to serve SSA’s diverse customers in the twenty-first century.

Performance Indicator FY 2001 oal

IV.9 Complete Agency plan for transitioning to the workforce ofthe Future

IV.9a plement and updatetransition plan

IV.9b velop and implement

action items fromemployee survey

Strategic Goal V: To strengthen public understanding of the Social SecurityPrograms.Objective: 2005, 9 out of 10 Americans will be knowledgeable about the Social Security programs in five important areas.

Performance Indicator FY 2001 oal

V.1 Percent of individuals issued Social Security Statements asrequired by law

V.2 Percent of public who are knowledgeable about Social

V.1 100%

V.2 70%

G

Im

De

By

G

Security programs




Appendix B Agency Comments

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038)



SOCIAL SECURI1Y

Refer To: S lJ-3

JamesG. Ruse, Jr.

Inspector General

Larry G. MassanariActing -

The"Office of the 'ector. General Draft Report, "Review of Social Security Administration's

Fiscal Year 2001 ~~ual Performance Plan" (A-02-00-10038)--INFORMATION

May 2,2001

0°Our comments on the subject report are attached. If your staffhave any questions, they may

contact Robert Berzanski on extension 52675.

Attachment:

SSA Comments



COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL’S DRAFT REPORT,

“REVIEW OF THE SOCIAL SECURITY ADMINISTRATION’S FISCAL YEAR 2001

ANNUAL PERFORMANCE PLAN” (A-02-00-10038)

Thank you for the opportunity to review and provide comments on this draft report. Weappreciate that the report notes that our Annual Performance Plan (APP) for fiscal year(FY) 2001 represents the strong commitment of the Social Security Administration(SSA) to meet the objectives of the Government Performance and Results Act (GPRA)of 1993. Following are our comments on the recommendations.

Recommendation 1

Set goals for those management challenges for which measurable corrective action ispossible.

Comment

We agree with the recommendation to establish goals for management challenges,when quantifiable or measurable targets are appropriate. We believe we havemeasurable targets for those management challenges which SSA has determinedshould be tracked in the APP, e.g., solvency, disability redesign, fraud, and customerservice. SSA management will continue to identify areas to be included in the APP asappropriate.

Recommendation 2

Establish more outcome-based and service-related measures.

Comment

We agree in principle with the recommendation to establish more outcome and servicerelated measures, and believe we continue to improve in this area. The FY 2002 planindicates that efficiency indicators will be developed for initial claims and post-entitlement workloads. Establishing outcome-based and service-related measures is anevolving process, and SSA management will evaluate the feasibility of establishingmeasures for additional workloads in future plans.

Review of the SSA’s Fiscal Year 2001 Annual Performance Plan (A-02-00-10038) B-2



Recommendation 3

Provide a basis upon which to compare goals and subsequent performance withcustomer expectations.

Comment

We agree that there may be value in such comparisons as they affect specificmeasures. SSA sets goals based on customer interests in combination with historicalexperience, benchmarks and investments. We then utilize a balanced scorecardapproach to measure progress toward attaining those goals.

Recommendation 4

Specifically identify resources needed to accomplish planned performance.

Comment

We do not agree with this recommendation. Although we recognize that a strong linkbetween budget and planned performance is desirable, and we are always looking forways to enhance this linkage appropriately, SSA is currently meeting the intent of GPRAin both its budget justifications and its performance plans. The draft report suggeststhat "staff years associated with many planned output goals could be disclosed."However, the draft report does not acknowledge that SSA's FY 2000 and FY 2001APPs already disclose, by workload, the total administrative funding budgeted toaccomplish key output measures. By disclosing cost allocations of total administrativefunding by workload, SSA believes that our performance plans have already gonebeyond this draft report suggestion, because total administrative funding betterrepresents full administrative costs than would the disclosure of just staff years orestimated costs of individual contracts.

SSA is also pleased to see that the draft report acknowledges our FY 2001 APP"includes significantly more data on information technology (IT) and capital investment."This portion of SSA's FY 2001 performance plan was strengthened to better relate plansto resources. For example, the IT/Capital Investments section includes a new tabledisplaying the IT Systems budget by baseline operations, strategic priorities, andcrosscutting IT initiatives. Although not acknowledged in the draft report, SSA alsostrengthened the linkage between plans and resource requirements in the FY 2001 APPby adding a new section summarizing estimated FY 2001 workyear savings frominitiatives proposed in the Agency's budget.




Recommendation 5

Coordinate with the Health Care Financing Administration (HCFA) to determine whichagency should establish performance goals for service to Medicare recipients.

Comment

SSA will explore the feasibility of establishing such a goal. On page 7 of the draftreport, OIG commented that the goal for the project to validate the medical listings isvague and that SSA did not clearly identify how accomplishments in FY 2000 relate tothe goal for FY 2001. OIG also commented that the indicator would have been morevaluable if there had been an indication and basis on which listings would be validatedfirst.

In the 2000 Accountability Report we noted that the Disability Research Institute (DRI)was working on a project to develop a method by which the Medical Listings could be

validated. Completing a preliminary report on the development of a validationmethodology is a goal in the 2001 Performance Plan. Next steps include:

1. Developing criteria to be used to validate the listings. The validation criteria will bereviewed by program, medical, and technical experts before being finalized.

2. Creating methods to assess whether the impairments described in the listingsconstitute a reasonable presumption of inability to perform substantial gainfulactivity.

3. Developing a method for making those criteria operational. Deciding which listing toexamine first. We intend to base our choice of a listing on considerations such asthe appropriateness of the validation methodology for a particular type ofimpairment, the potential costs of the analysis, the likelihood of success, andprogrammatic concerns, including numbers of applications and decisional accuracy.






DISTRIBUTION SCHEDULE

No. of

CaRies

1

10

1

1

3

1

1

Commissioner of Social Security

Management Analysis and Audit Program Support Staff, OFAM

Inspector General

Assistant Inspector General for Investigations

Assistant Inspector General for Executive Operations

Assistant Inspector General for AuditI

Deputy Assistant Inspector General for Audit

Director, Systems Audit Division

Director, Financial Management and Performance Monitoring Audit Division 1

Director, Operational Audit Division 1

Director, Disability Program Audit Division 1

1jrector, Program Benefits Audit Division

Director, General Management Audit Division

25

1

1

1

1

2

1

2

2

1

Issue Area Team Leaders

Income Maintenance Branch, Office of Management and Budget

Chairman, Committee on Ways and Means

Ranking Minority Member, Committee on Ways and Means

Chief of Staff, Committee on Ways and Means

Chairman, Subcommittee on Social Security

Ranking Minority Member, Subcommittee on Social Security

Majority Staff Director, Subcommittee on Social Security

Minority Staff Director, Subcommittee on Social Security

Chairman, Subcommittee on Human Resources

Ranking Minority Member, Subcommittee on Human Resources

Chairman, Committee on Budget, House of Representatives

Ranking Minority Member, Committee on Budget, House of Representatives

Chairman, Committee on Government Reform and Oversight

Ranking Minority Member, Committee on Government Reform and Oversight

Chairman, Committee on Governmental Affairs

Ranking Minority Member, Committee on Governmental Affairs



Page 2

Chairman, Committee on Appropriations, House of Representatives 1

Ranking Minority Member, Committee on Appropriations,

House of Representatives 1

Chairman, Subcommittee on Labor, Health and Human Services, Education

and Related Agencies, Committee on Appropriations,

House of Representatives 1

Ranking Minority Member, Subcommittee on Labor, Health and Human

Services, Education and Related Agencies, Committee on Appropriations,

House of Representatives

Chairman, Committee on Appropriations, U.S. Senate

1

1

Ranking Minority Member, Committee on Appropriations, U.S. Senate 1

Chairman, Subcommittee on Labor, Health and Human Services, Education

and Related Agencies, Committee on Appropriations, U.S. Senate 1

Ranking Minority Member, Subcommittee on Labor, Health and HumanServices, Education and Related Agencies, Committee on Appropriations,

U.S. Senate

Chairman, Committee on Finance

1

1

Ranking Minority Member, Committee on Finance 1

Chairman, Subcommittee on Social Security and Family Policy 1

Ranking Minority Member, Subcommittee on Social Security and Family Policy 1

Chairman, Senate Special Committee on Aging 1

Ranking Minority Member, Senate Special Committee on Aging1

Vice Chairman, Subcommittee on Government Management Information

and Technology 1

President, National Council of Social Security Management Associations,

Incorporated

Treasurer, National Council of Social Security Management Associations,

Incorporated

Social Security Advisory Board

1

1

1

AFGE General Committee

President, Federal Managers Association

9

1

Regional Public Affairs Officer 1

Total 97



Overview of the Office of the Inspector General

Office of Audit

The Office of Audit (OA) conducts comprehensivefinancial and performance audits of the

Social Security Administration's (SSA) programs and makes recommendations to ensurethatprogram objectives are achieved effectively and efficiently. Financial audits, required by the

Chief Financial Officers Act of 1990, assesswhether SSA' s financial statementsfairly present

the Agency's financial position, results of operations, and cash flow. Performance audits reviewthe economy, efficiency, and effectiveness of SSA' s programs. OA also conducts short-term

managementand program evaluations focused on issuesof concern to SSA, Congress,and the

generalpublic. Evaluations often focus on identifying and recommending ways to prevent and

minimize program fraud and inefficiency.

Office of Executive Operations

The Office of Executive Operations (OEO) supports the Office of the Inspector General (OIG) byproviding information resourcemanagement;systemssecurity; and the coordination of budget,

procurement, telecommunications, facilities and equipment, and human resources. In addition,

this office is the focal point for the OIG's strategic planning function and the development and

implementation of performance measuresrequired by the Government Performance and Results

Act. OEO is also responsible for performing internal reviews to ensurethat OIG offices

nationwide hold themselves to the samerigorous standardsthat we expect from the Agency, as

well as conducting employee investigations within OIG. Finally, OEO administers OIG's public

affairs, media, and interagency activities and also communicates OIG's planned and current

activities and their results to the Commissioner and Congress.

Office of InvestigationsThe Office of Investigations (01) conducts and coordinates investigative activity related to fraud.

waste, abuse,and mismanagementof SSA programs and operations. This includes wrongdoing

by applicants, beneficiaries, contractors, physicians, interpreters, representativepayees,third

parties, and by SSA employeesin the performance of their duties. Or also conductsjoint

investigations with other Federal, State,and local law enforcement agencies.

Counsel to the Inspector General

The Counsel to the Inspector General provides legal advice and counsel to the Inspector General

on various matters, including: l) statutes,regulations, legislation, and policy directives

governing the administration of SSA' s programs; 2) investigative procedures and techniques; and3) legal implications and conclusions to be drawn from audit and investigative material produced

by the DIG. The Counsel's office also administers the civil monetary penalty program.

Documents

Social Security: A-02-00-10038